UK Serious Fraud Office opens Libor investigation

The UK Serious Fraud Office has confirmed it has launched a criminal investigation into the rigging of Libor, following action by UK and US regulators, and soon also parliament.

A team at the SFO has now started work on the matter, which has encompassed both UK- and foreign-headquartered banks manipulating the interest rates at which they lend to one another in the UK.

It was triggered by an investigation by the UK Financial Services Authority, and has led to combined finers of £290 for Barclays, the resignation of its CEO Bob Diamond, plus traders and senior executives at the bank.

The US Department of Justice is conducting its own criminal investigation.

In a short statement on the SFO website, it said today: “The SFO director David Green QC has today decided formally to accept the Libor matter for investigation.”

The government department responsible for prosecuting complex and serious fraud did not give details of how long it expected the investigation to take, nor further details about the nature of its activity.

Elsewhere in the government, the major parties are divided on how best to pursue the matter themselves.

The Conservatives have won a vote on a cross-party review of the case. The Opposition Labour party wanted a judge-led enquiry, but lost the vote on this it proposed in the House of Commons yesterday.

The difference of opinion led yesterday to a robust exchange of views between the Chancellor of the Exchequer George Osborne and his Opposition counterparty Ed Balls.